Vaiven

According to the UN, more than 10 million Latin Americans have been displaced from their home countries due to violence, drug-related crime, and political and economic instability. Inaccessible banking institutions push them to resort to more expensive and unofficial providers in order to access basic financial products such as personal loans and money transfers. As most forcibly displaced people live in poverty, are informal workers, and have no credit history, they are charged high rates and fees, which further erode their financial stability. With Vaiven, we seek to provide refugees essential banking services and financial education at their fingertips with an app that helps store, protect, and transfer their money, no matter where they or their families are. Using blockchain technology and a digital wallet, Vaiven has the potential to help over 10 million refugees access reliable, safe, and affordable virtual financial services, enabling economic integration in a new country.

According to the United Nations, some 10 millions Latin Americans have been displaced from their home countries due to violence, drug-related crime, gangs, and political and economic instability. Most migration has been intraregional, thus challenging receiving-country governments to regulate refugees’ immigration status and their integration into their educational, health-care, and financial systems. With some of the highest rates of unbanked local populations in the world, Latin America has left most refugees with no access to banks and other mainstream financial services. Traditional banking institutions require national IDs and other documentation that indirectly limit their services to domestic residents. This has forced many to resort to more expensive financial institutions which charge a large fee to send money back home or take a loan, among others. For example, two of the five million Venezuelans in exile have emigrated to Colombia, from where they send over 20 million dollars every year through money senders that charge a fee of between 8% and 10% on top of a spread on the exchange rate. Further, displaced populations show very low financial literacy, and lack a basic understanding of how to budget, save, and invest their scarce financial resources. 

Vaiven is a multi-currency digital wallet specifically designed to address the most significant constraints to financial inclusion faced by refugees (including forcibly displaced people and asylum seekers) in Latin America:

First, it uses blockchain technology to send, store, and receive money across borders offering a competitive fee of 1-3%. The platform is accessible through a mobile device and anyone with the app, including friends and employers can also contribute into a customer’s account. 

Second, it provides a seamless customer verification process by accepting many different forms of official IDs. Refugees can sign up and verify their identity using their national ID, passport, student ID, and many others. 

Third, it tackles financial illiteracy with a customized set of short, free and intuitive trainings on personal finance. The modules aim to provide users a fundamental understanding of prioritizing saving, understanding interest rates, and the basics of budgeting, among others.

Finally, leveraging its success in Africa, it brings in a unique feature that has not been exploited in LatAm: physical agents. Our network of agents on the field are trusted people in the communities in which Vaiven operates, to encourage adoption and mitigate skepticism and prevalent distrust of new technologies. 

The refugees situation in Latin America is critical and yet has not been given the media attention it warrants. More than 4 million Venezuelans have left their country and installed in neighboring countries due to the ongoing political and economic crises. Meanwhile, the Northern Triangle countries of El Salvador, Guatemala and Honduras are among the world’s most violent, with cartels and gangs have contributed to at least 40,000 recognized refugees in the last five years. Most of these migrants face the double challenge of securing their own as well as their loved ones financial security, health, and wellbeing. Further, the COVID-19  pandemic threatens  the intraregional flow of regional remittances just as it shows how ill-prepared host countries are to manage the gathering migratory disruption. Most attempts and ventures aimed at helping Latin American refugees so far have been focused on those living in the US and to a lesser extent, those living in Europe, even when intraregional migration significantly outweighs migration to the US migration coming from LatAm. 

With Vaiven, we hope to develop an integrative solution to the financial challenges faced by refugees and forcibly displaced people who are from and living in Latin America. We want to create a centralized virtual bank connecting those who still remain underserved by digital and technological solutions, offering accessible financial products for sending, receiving, and storing money. Further, we want to provide the tools to empower them with the education and training to make smart financial decisions and improve their standard of living. 

Vaiven originated from the cofounders personal experiences in Mexico and Argentina, two countries with over 600,000 and 300,000 refugees. Both of us have worked in the public sector in the area of economic development and understand that local governments are already pressed for resources, which are being allocated to citizens. Refugees, which provide no political capital,  are at the bottom of the list of priorities. In our roles as Directors we got to interact with various associations for Latin American immigrants and became aware of their regulatory, economic, legal, and cultural challenges integrating into our respective countries, while also often struggling to support their families they had left behind. More importantly, we realized that market solutions across various industries also excluded them, often because of issues as simple as not having official IDs. This led us to start Vaiven. 

Aside from working in getting Vaiven off the ground, we are working on two main fronts. Firstly, we are finalizing a few key partnerships with domestic financial and banking institutions in Mexico, Argentina, and Colombia to extend our network and establish powerful synergies. Further, we are continuing to research and connect with organizations advocating for Latin American refugees (primarily from Venezuela, Honduras, and Nicaragua) to understand what are their challenges, concerns, and needs. Finally, we are continuing to research and connect with refugees and displaced migrants to understand what their challenges, concerns, and needs are to tailor our solutions to them.

Vaiven will have both immediate and long-term potential benefits. We are offering a concrete, safe, and accessible alternative to the extortionary rates and fees that other companies currently charge refugees for the same services. Furthermore, by centralizing many other services in the future, we offer them the ability to develop a credit history, pay for services, accrue interest, and make smarter financial decisions. Vaiven is a lot more than just an app. It will allow refugees to integrate into the formal and digital economy by accessing essential financial services and banking products, ultimately improving their financial stability and wellbeing. 

We are currently working on the development of the app and expect to start the pilot in October 2021. We are also finalizing our agreements with the partners that will be necessary in the remittances chain. We recently received our license to operate from Mexico’s CNBV and have already raised 13,000USD to cover the costs needed for the pilot. Further funding will be needed to reach a critical mass for the pilots in other regions. We are also working on presenting the required documentation to be able to launch the app as a digital bank and accept international transfers in Argentina and Colombia. 

Our solution is innovative in three main ways:

1. The population we are focused on. Many fintech services and platforms for remittances and digital wallets have focused on US-Latam or Europe-Latam corridors because of their market size and revenue potential. Due to the constraints mentioned before, few options have been left for refugees and displaced populations living in other Latin American countries. By focusing exclusively on the needs and requirements of these populations we can target Vaiven accordingly. 

2. The technology itself. Blockchain is an extremely innovative and disruptive way of conducting remittances transactions. Most companies still operate using traditional railways and money senders (albeit at the expense of higher fees). However, this platform eliminates the need for middle stakeholders through smart contracts.

3. Products that merge financial literacy with actual financial services remain a novelty, in particular those involving behavioral nudges in order to improve the wellbeing of our users. Most are still focused on one or the other. We plan on combining them. The goal is that we can impact not only refugees’ access to resources but also how they use them, with the goal that they can maximize their economic prosperity. 

If Vaiven succeeds it could lead to a new suite of integrated financial and digital services focusing on intraregional migrants in Latin America. A lot has been done with refugees and displaced migrants in Africa that could serve as an aspiration goal (ex. Access to microcredits, access to the digital gig economy, etc). We firmly believe that our product could be the platform that in the future integrates all these opportunities for the communities of refugees in Latin America. 

Vaiven hasn’t yet launched but we are aiming to start the pilot this year targeting 500 users. Our 5-year growth plan:

Y1(2021-2022) 1000 users (Initial pilots)operations in Mexico and Argentina

Y2(2022-2023) 50,000 users, operations in Mexico, Argentina, and Colombia

Y3(2023-2024) 140,000 users, operations in Mexico, Argentina, Colombia and Venezuela

Y4(2024-2025) 230,000 users, operations in Mexico, Argentina, Colombia, Venezuela, Honduras, and Nicaragua

Y5(2025-2026) 600,000 users, operations in Mexico, Argentina, Colombia, Venezuela, Honduras, and Nicaragua

Number of Accounts Open: In our case, because the app is meant to offer highly competitive fees for international money transfers and would already be providing a service that is largely inaccessible to refugees and displaced migrants, the most important indicator to track would be the number of accounts opened. We believe that as with most fintech platforms and apps, number of accounts opened, funded, and used is a reflection of its usefulness and impact. 

Use of funds: Because at the end of the day we are seeking to improve the financial health of refugees and displaced migrants, we would also want to incorporate a series of questions to provide data on how access to these services is impacting our customer’s financial wellbeing. 

Identifiable information of Users: Because our target client are refugees in Latin America who don't have access to other institutions, we want to make sure that through the information we are able to collect, we are indeed reaching our group of interest. We will easily be able to collect this information from the IDs used as well as a series of questions

Financial literacy/decisions: Vaiven also aims to improve financial literacy so we want to make sure that our modules are shaping how much people chose to save, invest, and spend. We think the best way to do this is to integrate a series of short pop-up questions into the app to track social and educational impact. 

2 full-time staff (Ana Alvarez & Nico Maffey Co-founders)

2 part-time staff

4 contractors

• Nico Maffey: Has served as Director for Economic Development for the City of Buenos Aires, where he supervised the design and implementation of digital tools and services.  He also served as Director of Strategy at Animana, where he helped develop a digital wallet for indigenous artisans in South America selling crafts online. Currently, he is interning at BankaYa, a Mexican fintech, where he leads a project on remittances for the US-Mexico corridor using blockchain, which will launch in August. He is a student in the MPA-ID program at HKS.

• Ana Alvarez: She is the former Director of Financial Analysis at Mexico’s Ministry of Finance. There, Ana was in charge of formulating the Ministry’s stance on international financial issues and conducting the Ministry's participation in international financial organizations . She designed policies to boost sustainable growth and inclusion within Mexico’s financial system. Currently, she is pursuing a double degree at HKS and an MBA at MIT Sloan.

• Francisco Alvarez has a major in Business Administration in Finance. He is certified in Adventis Financial Modeling and Bloomberg Market Concepts (BMC). Co-founder and CEO of Fonpico, a Real Estate Crowdfunding company since 2016 and Founder and CEO of I SEE YOU TECH a Technology company specialized in Software Development, Big Data and VR & AR.

• Adan Ramirez (Back End Developer): Adan has a degree in Computer Systems Engineering, specializing in mining and data analysis. Adan has worked with MSSQL, Active Directory, HelpDesk, Unity, Google SDK VR and HTTP, TCP, IP protocols, among others.

Diversity is a core value to Vaiven and we are extremely committed to building a diverse, equal, and inclusive community, both among our clients as well as within our team. Both co-founders, Ana and Nicolas, have been shaped by their experiences in their respective countries, Mexico and Argentina, and value tremendously the insights of international voices to support the development of inclusive products that address the needs of every individual, regardless of their sexual orientation, gender, disability, race, color, ancestry, or nationality. 

Further, as a woman and lgbt man, both co-founders personally appreciate the challenges and importance of increasing representation of minorities among professionals occupying positions of leadership. Coming from the public sector in Latin America, where women and lgbt professionals represent a stark minority, we have both experienced what it’s like to have few professional role-models to look up to at the workplace. As such, we want to actively build an inclusive and supportive working team where diversity is encouraged in every possible way is encouraged. Furthermore, as research has proven more than once (in both private and public matters), when decision makers fail to account for gender, public spaces and products become male bias by default.

• Although we firmly believe that given our experience we can bring Vaiven to fruition, we are certain that we would significantly benefit from the support of Solve’s network. 

• First, by joining a network of leaders who share the passion to address some of the world’s most pressing challenges with innovative solutions, we would be able to gain inspiration, mutual support, and guidance through others’ experiences. We believe that we can learn a great deal from others who are facing similar challenges in other regions, contexts, and with other clients base. 

• Second, the mentorship, coaching, and strategic advice from experts would guide us as we pilot, refine, and build Vaiven. We are aware that our venture is ambitious and faces significant cultural and operational barriers and will require navigating an unexplored approach. In that sense, we believe the mentorships will be vital. 

• Finally, the financial support through grants and investment would prove vital to cover operational and legal expenses that we incur as we build and expand our venture.

Given that the fintech industry faces significant legal/regulatory challenges, we would significantly benefit from support and advise on navigating the contexts of countries which still don't have a clear approach on how to approach digital assets, international transfers via digital wallets, etc.

As we continue seeking financial support we'd significantly benefit from advise on how to pitch to investors to garner interest and gain financial support from VC firms and incubators. We believe this to be crucial as we currently don't have the financial resources we need to be fully operational. 

Finally, we would benefit from help and guidance as (is often the case with fintech startups) adapt our business model in the mid-term to ensure profitability. 

We believe that two immediate partnerships that could be really useful to us are:

1- MIT Digital Currency Initiative 

2- Christian Catalini could serve as a great adviser and also help us connect us to other neobanks that could serve as partners, primarily as we seek to expand our operations. 

As discussed, Vaiven is seeking to provide a banking solution to over 10 million refugees that exist in Latin America, who have been displaced from their home countries due to violence, drug-related crime, and political and economic instability. Inaccessible banking institutions push them to resort to more expensive and unofficial providers in order to access basic financial products such as personal loans and money transfers. As most forcibly displaced people live in poverty, are informal workers, and have no credit history, they are charged high rates and fees, which further erode their financial stability. With Vaiven, we seek to offer refugees essential banking services and financial education at their fingertips with an app that helps store, protect, and transfer their money, no matter where they or their families are. Our product is innovative and has enormous potential to be a pioneer in digital financial solutions to Latin American refugees. 

If awarded the prize, we would use it to cover operational, legal, and administrative expenses, develop a more sophisticated technology, and most likely offer a better product and escalate operations more quickly. Winning the Andan Prize for Innovation in Refugee Inclusion would certainly get us significantly closer to building a concrete, sustainable, and effective solution that helps mitigate a humanitarian crisis in our region. We would also significantly benefit from joining a community of professionals who have navigated similar challenges and could serve to provide guidance, mentoring, and networking. 

Traditional banking institutions in Latin America require national IDs that indirectly limit their services to domestic residents. This has forced refugees in the region to resort to more expensive financial institutions which charge a large fee to send money back home or take loans. Vaiven is a multi-currency digital wallet specifically designed to address the most significant constraints to financial inclusion faced by refugees in Latin America. It uses blockchain technology to send, store, and receive money across borders offering a competitive fee of 1-3%. The platform is accessible through a mobile device and anyone with the app, including friends and employers can also contribute into a customer’s account. Further, it tackles financial illiteracy with a customized set of short, free and intuitive trainings on personal finance. The modules aim to provide users a fundamental understanding of prioritizing saving, understanding interest rates, and the basics of budgeting, among others. 

Financial inclusion and literacy are vital to economic wellbeing and prosperity. Now, with the impact of COVID-19, well-being has deteriorated

among the financially excluded. People who might previously
have felt financially secure, find themselves either on the brink
or are now in financial crisis. This is especially so for refugees in Latam, which face serious additional challenges including xenophobia, racism, and cultural and professional exclusion. We are certain that if awarded the HP Prize, we would have the support to build Vaiven and mitigate digital and financial inequality and help contribute to their wellbeing and prosperity. 

Traditional banking institutions in Latin America require national IDs that indirectly limit their services to domestic residents. This has forced refugees in the region to resort to more expensive financial institutions which charge a large fee to send money back home or take loans. Vaiven is a multi-currency digital wallet specifically designed to address the most significant constraints to financial inclusion faced by refugees in Latin America. At the center of its innovation is its use of blockchain technology and stable coins to send, store, and receive money across borders offering a competitive fee of 1-3%. Our product using blockchain remittance would be one of the first in Latin America and certainly the first targeting its community of refugees, which could offer improved speed and lower transaction fees. Further, Vaiven tackles financial illiteracy with a customized set of short, free and intuitive trainings on personal finance. 

If awarded the prize, we would use it to cover operational, legal, and administrative expenses, develop a more sophisticated technology, and most likely offer a better product and escalate operations more quickly. Winning the GSR Prize would certainly get us significantly closer to building a sustainable and effective solution that helps mitigate a humanitarian crisis in our region. Further, it would help us set precedent on a product that targets refugees using blockchain in Latin America. Finally, we would significantly benefit from being supported by a team who understands the potential of blockchain in generating solutions for the financially excluded.